Correlation Between Barclays ETN and ProShares
Can any of the company-specific risk be diversified away by investing in both Barclays ETN and ProShares at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Barclays ETN and ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays ETN Select and ProShares SP Kensho, you can compare the effects of market volatilities on Barclays ETN and ProShares and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Barclays ETN with a short position of ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays ETN and ProShares.
Diversification Opportunities for Barclays ETN and ProShares
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Barclays and ProShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Barclays ETN Select and ProShares SP Kensho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares SP Kensho and Barclays ETN is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Barclays ETN Select are associated (or correlated) with ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares SP Kensho has no effect on the direction of Barclays ETN i.e., Barclays ETN and ProShares go up and down completely randomly.
Pair Corralation between Barclays ETN and ProShares
Given the investment horizon of 90 days Barclays ETN Select is expected to generate 0.58 times more return on investment than ProShares. However, Barclays ETN Select is 1.73 times less risky than ProShares. It trades about 0.21 of its potential returns per unit of risk. ProShares SP Kensho is currently generating about 0.07 per unit of risk. If you would invest 2,380 in Barclays ETN Select on September 1, 2024 and sell it today you would earn a total of 648.00 from holding Barclays ETN Select or generate 27.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays ETN Select vs. ProShares SP Kensho
Performance |
| Timeline |
| Barclays ETN Select |
| ProShares SP Kensho |
Barclays ETN and ProShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays ETN and ProShares
The main advantage of trading using opposite Barclays ETN and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays ETN position performs unexpectedly, ProShares can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ProShares will offset losses from the drop in ProShares' long position.| Barclays ETN vs. First Trust North | Barclays ETN vs. Global X MLP | Barclays ETN vs. Tortoise North American | Barclays ETN vs. UBS AG London |
| ProShares vs. Nexalin Technology | ProShares vs. Kilroy Realty Corp | ProShares vs. Highwoods Properties | ProShares vs. Karat Packaging |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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